Here's an overview of the changes.
- The DAX expansion will take place from September 2021. The mid-cap MDAX Index will shrink to 50 from 60 members, while the small-cap SDAX remains unchanged.
- Starting in December 2020, all new DAX candidates must have had positive earnings before interest, taxes, depreciation, and amortisation for the past two financial years.
- Beginning in March 2021, all companies in any DAX index are required to publish audited annual financial reports and quarterly statements. Deutsche Boerse said that after a 30-day warning period, failure to comply would result in immediate exclusion from the index.
- Also from March 2021, index members will need to comply with the recommendations of the German Corporate Governance Code that require the formation of an audit committee in the supervisory board. There is a transition period for existing members.
- From 2021, the indexes will be scheduled for review twice a year, in March and September. Currently, the review takes place each September.
- Membership will be based on market capitalisation from the September 2021 review, while exchange turnover will no longer play as significant a role.
(Reporting by Tom Sims; editing by Jason Neely)